As a business owner, you know that you may experience regular auditing – some audits you will initiate internally, to monitor your business progress. Others may be initiated by outside entities. The key to getting through an audit with the minimum amount of stress is organisation, so each time you set up something new in your business you should do so with a mind to that system being investigated at some point. For a business that goes from being a one-man operation to having employees this includes starting up appropriate coverage and being prepared for annual workers compensation audits.
Different states have slightly different regulations regarding workers comp, so you need to check your local authority to make sure your business complies or speak to an agent for advice about the requirements for your business.
When you do take out the coverage, you should start a system where you keep records of everything and anything that relates to your employees, contractors and payroll. The information you will need for workers compensation audits includes anything that relates to the work your employees do, and the hours they’ve worked. You’ll also need to keep records relating to contractors. Your record keeping needs to be accurate and comprehensive so that the auditor can make the right assessments for the level of coverage required for your workers’ compensation policy.
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